[photopress:IT_ailibaba.jpg,full,alignright]Chinese e-commerce firm Alibaba.com has entered the fray of Internet advertising with an online platform for Websites and advertisers to match up.
Its new unit — Alimama.com — which has gone through 100 days’ trial operation, will compete with other Chinese online adverting alliances in attracting small Websites, including bloggers’ spaces, to help them make money out of their traffic. These are, of course, led by Baidu.com and Google who are formidal competitors.
Jin Jianhang, vice president of Alibaba, said, ‘We are just offering a practical business model for the small sites to grow.’ He added that small Websites ‘deserve a better model’ than relying on the commission from search engines by serving as their extended advertising space.
Alimama’s model is claimed to be more transparent in that it allows small Websites to deal with advertisers directly.
Baidu, China’s No. 1 search engine, and Google have teamed up with hundreds of thousands of smaller Chinese Websites that joined their ads revenue sharing program. The small sites display the ads from the search engines’ customers on their sites and are paid by the number of clicks.
This is pretty standard operating procedure for Google around the world and advertisers are sometimes somewhat frustrated because it is a far from transpartent procedure. Indeed, opaque would be a good word.
It has become increasingly important for search engines to boost sales. For Baidu, traffic acquisition cost in the third quarter accounted for 12% of total sales, up three percentage points from a year ago.
Meanwhile, Alimama copies the business-to-business trading model of Alibaba. Alimama charges 8 to 15% of the advertisements value.
Advertisers such as Bank of China and Citic Bank as well as some online game companies have signed contracts with Alimama to place ads on the site.
It has 150,000 small and medium Websites and 135,000 bloggers’ spaces ready to take advertising. It is an interesting concept. If it works in China it will probably be picked up elsewhere around the world. And if anyone can make it work it will be Alibaba and Alimama.
Source: Jongo News